Bitwise Seeks SEC Approval to Issue Spot Ethereum ETF

This move happens after claims by the company’s Chief Investment Officer that late approvals would be better for the market.

On March 29, Bitwise, a crypto investment company, applied with the Securities and Exchange Commission (SEC) to offer a spot Bitcoin exchange-traded fund (ETF). It joins a highly crowded field of firms vying to unveil the initial Ethereum spot exchange-traded fund to market after Bitcoin spot ETFs’ eventful inauguration earlier this year. 

Bitwise Seeks Approval for Spot Ethereum ETF

The S-1 registration form filed by Bitwise shows that the suggested ‘Ethereum Trust’ would hold Ethereum. Additionally, it might stake part of the fund’s assets via trusted staking providers to acquire extra prizes. 

Staking has evoked inquiries from government regulators and entails locking up ether to safeguard the Ethereum platform and verify transactions. Participants are rewarded with freshly produced ether.

The entry of Bitcoin into the Ethereum spot exchange-traded fund happens amid rising interest from conventional financial companies. Van Eck, BlackRock, and Grayscale recently filed proposals with the Securities and Exchange Commission to unveil their Ethereum spot exchange-traded funds.

Crowded Race for Spot Ethereum ETF 

The heightened competition illustrates the potential demand for these kinds of products. In this case, investors desire exposure to the second-biggest cryptocurrency without having to directly buy or store it. 

The filing happens soon following a prediction by a Bitwise official that ratification for an Ethereum spot exchange-traded fund would not happen this summer as envisaged by most people. They also said that waiting for some time would be the best idea. In a tweet, Matt Hougan, Chief Investment Officer at Bitwise, noted that spot Ethereum exchange-traded funds will amass more assets if unveiled in December compared to their unveiling in May. Further, TradeFi requires additional time to digest the Bitcoin exchange-traded funds. 

In recent months, the Securities and Exchange Commission has slowed down decisions on numerous high-profile Ethereum spot exchange-traded funds. Examples include Grayscale, Galaxy Digital, Invesco, BlackRock, and Grayscale. 

Ultimate Approval of Spot Ethereum ETF to Stimulate Inflows

Analysts such as James Seyffart earlier envisaged that delays would happen until May 23, the closing date for the earliest applications from Ark Invest and Van Eck. Currently, he believes they will be rejected.

Experts consider that delayed approval of the spot Ethereum ETF is beneficial to the ecosystem that is gaining familiarity with the Bitcoin ETF. 

In spite of the delays, several experts are still positive about the Ethereum spot ETFs’ projections. Standard Chartered, a UK multinational bank, anticipates the Securities and Exchange Commission will ratify these kinds of products by May, referring to the regulator’s absence of the designation of ether as a security. 

Further, the bank also envisages that ether’s price could attain $8000 by the end of this year and $14000 by the end of 2025, partly driven by the expected sanction of spot exchange-traded funds.

The likely effect of Ethereum spot exchange-traded funds on the cryptocurrency market could be considerable. Since Bitcoin spot ETFs’ ratification in January, a significant amount of dollars have been transferred into these funds, increasing the price of the major cryptocurrency. The same impact might be witnessed with Ethereum as conventional investors acquire a more available avenue to invest in the asset.

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